The Dekagram: 2nd November

This week John Schmitt addresses issues arising over pleading a bare denial in a Defence, something likely to interest all practitioners who draft on either side of a dispute and yet which is rarely dealt with by the courts; whilst Robert Parkin examines a case involving assumption of responsibility and the extent of advisors’ duties in a context which may be considered to be analogous to timeshare.

Investec Bank (Channel Islands) Ltd v Gurminderjit Singh Dhillon & Ors [2026] EWHC 2193 (Ch) (13 July 2026): Pleading Points

The Background

The case is Investec Bank (Channel Islands) Ltd v Gurminderjit Singh Dhillon & Ors [2026] EWHC 2193 (Ch) (13 July 2026). In broad terms, in a refinancing transaction, the Claimant bank had loaned sums to the 1^st Defendant with security for the lending in the form of a charge over the 1^st Defendant’s properties. This necessitated property transfers to create titles to be subject to the charge. The 2^nd Defendant lived in one of the properties and sought to assert the Claimant’s charge to be ineffective against his beneficial interest.

The Issue

The Claimant had pleaded detailed allegations against the 2^nd Defendant in paragraphs 28 to 30 of the Particulars of Claim. The Claimant’s case in summary is that the 2^nd Defendant consented to authorise and participated in the refinancing transaction and that it is not open to him now to assert that the Claimant’s charge is ineffective as against his beneficial interest. The pleading averred the 2^nd Defendant had consented to, or else authorised and directed the loan transaction and the registering of the charge, or else would be estopped from denials to the Claimant’s case, or as a further alternative case, argued subrogation to another lender’s rights (regarding the use of loan sums to discharge a different charge).

Despite the very full particulars and the complex legal matrix, the Defendant simply responded, “Paragraphs 28 to 30 are denied.”

The Claimant applied for an order seeking to strike out the Defence of the 2^nd Defendant under CPR 3.4(2)(a) on the ground that the Defence discloses no reasonable grounds for defending the claim.

CPR 16.5 and the Pleading of Denials

CPR 16.5 provides at subparagraph (1):

In the defence, the defendant must deal with every allegation in the particulars of claim, stating –

(a) which of the allegations are denied;

(b) which allegations they are unable to admit or deny, but which they require the claimant to prove; and

(c) which allegations they admit.

(2) Where the defendant denies an allegation –

(a) they must state their reasons for doing so; and

(b) if they intend to put forward a different version of events from that given by the claimant, they must state their own version.

Practice direction 3A paragraph 1.4 is to similar effect.

The Judgment

Chief Master Shuman noted that the Defence pleads no factual basis which could be employed to support the denial in paragraph 33. It was admitted that the 2^nd Defendant had participated in the transaction, and had assented to the proposal and acceptance of the financial benefit generated by it, rather than being a passive observer of events.

The judgment also noted that the Defence pleads no mistake, misunderstanding, want of authority on the part of the 2^nd Defendant’s solicitors, limitation upon the authority conferred, or lack of knowledge concerning the source of the payment received. Hence the Defence advances no positive factual case which, if proved, would explain how the admitted sequence of conduct is consistent with the denial of authority or consent.

The Defence therefore was held to fall squarely within CPR 3.4(2)(a) and within the example identified in paragraph 1.4 of practice direction 3A, namely, a statement of case which, even if all the facts pleaded are true, discloses no legally sustainable Defence.

Comment

The court commented that the rule at 16.5 is not a matter of formality; it serves an important forensic purpose. A denial must tell the other party and the court what factual issues are in dispute and why a Defendant is not entitled to simply deny a proposition, while elsewhere pleading primary facts which, if true, establish the proposition denied. That is particularly important on a strike out application. If the defence contains a bare denial but does not plead primary facts capable of sustaining it, the court is entitled to conclude that the pleading discloses no reasonable grounds for defending the claim.

The judgment is a useful reminder of the importance of ensuring the facts pleaded in a Defence can provide a legal answer to a claim. While there were factual issues and disagreements, ultimately they were not of central relevance to determining the issue of liability and could be disregarded. This allowed the court to find that a trial was not required to resolve genuinely competing factual narratives.

There were also potentially technical Defences available (mistake, fraud, insufficient authority etc) which, for unknown reasons, had not been advanced.

The judgment reminds practitioners of the stringent requirements of CPR 16.5, and the risks of non-compliance with the rule. The danger of drafting bare denials is plain.

The decision also provides a useful focus on the relevance of factual disputes to strike out applications. The presence of factual disagreement emerging from parties’ respective pleadings is conventionally a reason why strike out would be inappropriate, but here the Claimant was able to accept the Defendant’s factual case for the purposes of the application and, nonetheless, remain able to argue successfully for strike out.

About the Author

John Schmitt was called in 2013 and now specialises in complex personal injury work. He is also experienced in representing families at inquests in a clinical negligence context and has done so through the AvMA pro-bono inquest service. Most recently he has represented a family at a four day jury inquest at the conclusion of which the deceased’s employer was ordered to produce a Prevention of Future Deaths report. He is described by the Legal 500 as having a ‘lovely manner about him’ but being ‘as sharp as a tack’.

When the Sales Agent Becomes the Adviser: Moller & Ors v One Touch Solution Ltd (In CVL) & Anor [2026] EWHC 2559 (BP)

Introduction

In this case, the Court found that a property investment marketer, which presented itself as acting for the vendor, had nonetheless assumed a common law duty of care to the investors it sold to.

This was plainly not a straightforward decision, and even by the standards of the Business and Property Court, this was a lengthy judgment, running to 1111 paragraphs plus a Schedule- a fact compounded by the fact that the trial was on a liability only basis.

The decision is important for anyone advising on mis-selling claims against intermediaries, introducers and “online estate agents”- and, presumably, will prove of broader applicability outside that industry.  It also contains a significant ruling that an accepted award of The Property Ombudsman (TPO) can give rise to res judicata.

Background

Between September 2017 and March 2019, a total of 28 claimants bought leases of rooms in planned luxury care homes through the First Defendant, One Touch Solution Limited.

The homes were to be developed and run by companies in The Care Home Group Limited (TCHG), also known as the Carlauren Group. One Touch marketed the units for TCHG in return for commission. It reached buyers online, at events it held in places such as South Africa, and granted exclusive licences to sub-agents in countries such as Israel. The Claimants were, for the most part, not sophisticated investors- mostly being retired people or people working outside the property investment industry. The sole corporate investor was a Swiss family assets company.  Many used retirement savings or inheritances.

The sales pitch offered a “fail-safe, armchair investment.” Buyers were told of a guaranteed 10% yield over 10 years, buyback options, and homes that were already operating.

The true position was predictable. By mid-2019 every TCHG scheme had failed, and the group companies went into administration or insolvency in 2019 and 2020. The claimants lost all or nearly all of the roughly £2.8 million they had collectively paid. One Touch went into creditors’ voluntary liquidation in 2024. Its professional indemnity insurer was joined as Second Defendant under the Third Parties (Rights Against Insurers) Act 2010. Coverage and quantum were left for a later trial.

The Competing Cases

The Claimants said One Touch held itself out as an experienced property investment intermediary. It had called them its “clients,” claimed to put their interests first, and said it carried out due diligence on the developers it recommended. They stressed that they were not suing One Touch as an independent financial adviser. Their case was limited to the care and skill to be expected of the intermediary One Touch claimed to be.

One Touch’s answer was that it was only TCHG’s marketing agent under a General Service Agreement and passed on TCHG’s material. It argued that the purchasers’ losses came from fraud by TCHG’s controller, which fell outside any duty it owed. It also relied on its terms and conditions and on the disclaimers in its reservation forms. In addition, it ran arguments based on limitation and res judicata.

Contract: No Implied Retainer

The Court refused to find that a contract had been implied by conduct. The parties “would, or might, have acted as they did in the absence of a contract,” and no point could be identified at which a retainer was formed. That high bar was not met. However, this did not affect the claim in tort.

An Assumption of Responsibility

The Court applied familiar case law- most obviously Hedley Byrne v Heller– and the objective, fact-sensitive test for assumption of responsibility. It held that One Touch’s dealings “amounted to advice, not merely the giving of information.” Its website, seminars and one-to-one consultations presented a service that treated investors as clients and offered expert advice on suitable investments, chosen from products it said it had vetted itself. The judge also stressed that there is no general rule that a seller’s agent cannot owe a duty to a purchaser.

One Touch was held to owe a duty to use the reasonable care and skill of an experienced investment intermediary. It was also under a duty not simply to repeat what TCHG told it, but to carry out the due diligence described on its website. It adopted, and was liable for, TCHG brochures that it handed out under its own logo.

Expert Evidence

There was no expert evidence before the court as to the duties an intermediary would owe by reference to industry standards. Perhaps optimistically, it was argued for the Defendants that breach could not be established in such circumstances.

Unsurprisingly, the absence of expert evidence on intermediary standards was not a “fatal handicap,” because One Touch’s own description of its service set the content of the duty. In the alternative, the judge would have found the narrower duty to pass on information with due care that One Touch itself had proposed, and would have found that duty breached too. In particular, the sales team failed to explain that investors’ returns depended on a single undertenant.

Disclaimers and Terms

The Defendants also sought to rely on exclusions in signed terms and conditions. Again, this got nowhere. The terms and the reservation-form warnings were not incorporated into any contract and could not create a contractual estoppel. In any event, they did not exclude negligence with sufficiently clear words. They were also unfair under s.62 of the Consumer Rights Act 2015, or failed the reasonableness requirements of the Unfair Contract Terms Act 1977, depending on whether treated as contract terms or as non-contractual notices. The reservation form was treated as a quick administrative step, and it did not reset an advisory relationship of trust that had already been built.

Breach, Reliance and Scope of Duty

The representations made to the Claimants were found to be untrue, or made without reasonable grounds. Reliance was established in every case. The judge commented that One Touch “should have accepted that reliance has been proved.”

On scope of duty, the judge applied Manchester Building Society v Thornton and Meadows v Khan. She held that One Touch’s responsibility extended to the Claimants’ decisions to invest, because it had assumed a duty to protect them from “the very risks which caused their losses.” The fraud argument failed. Fraud by TCHG’s controller had not been pleaded or proved, and he was not a party. The judge also found no factual basis for concluding that the schemes could otherwise have succeeded. On the evidence, they were “seriously risky investment propositions.”

Vicarious Liability

One Touch was held vicariously liable for its Israeli sub-agent, Galon. Galon marketed the TCHG products with One Touch’s actual or apparent authority. It had been trained and supported by One Touch and was paid a share of One Touch’s commission. That made the relationship sufficiently akin to employment under Various Claimants v Barclays Bank.

The Statutory Claim Fails

The alternative claim for damages under the Consumer Protection from Unfair Trading Regulations 2008 failed. The Claimants had bought leasehold interests, and the right to receive rent was an attribute of those proprietary interests. Immovable property is not a “product” for this purpose.

Limitation

The judge held that the claimants’ cause of action accrued on exchange, not on payment of the £2,000 reservation fee. As a result, several claims challenged on limitation grounds were in time. A number of the Claimants also succeeded under s.14A of the Limitation Act 1980 for their earlier purchases (i.e. the damage was latent). They did not have the required knowledge until specialist lawyers advised them in 2022.

Res Judicata and The Property Ombudsman

Two Claimants had accepted TPO awards of £800 and £2,000 “in Full and Final Settlement.” Applying Clark v In Focus Asset Management and R (Coke-Wallis) v ICAEW, the judge held that TPO awards are judicial decisions capable of founding res judicata.

TPO is an authorized ADR entity under the 2015 ADR Regulations, and the principle applies to non-statutory tribunals in any event. The rule that TPO cannot adjudicate claims of negligence did not help the claimants. It is enough that the ombudsman decided whether the facts underlying the cause of action gave rise to a remedy. One claimant tried to withdraw his acceptance after the decision had become final, but that had no legal effect. Both claims were therefore barred. A similar argument against a third couple failed only because it had not been pleaded.

Outcome

Every claimant established liability, except (1) the Swiss company, which did not call its decision maker as a witness, and (2) the related claim about a separate hotel-room investment sold for a different developer. The two claimants who had accepted TPO awards were barred by res judicata. The issues of the insurance policy’s “investment advice” exclusion and quantum remain for the next trial.

Comment

The case is a clear reminder that labels are not a particularly important factor in establishing whether a duty exists. An agent paid by the vendor may still assume advisory responsibility to buyers through what it says about itself, and boilerplate disclaimers will rarely undo that with consumer investors. For Claimants, the res judicata ruling is a warning: accepting a modest ombudsman award may give up a far larger claim in court.

About the Author

Robert Parkin was called in 2009. He has a mixed civil practice, including in the area of travel and cross-border claims. He was junior drafting counsel in Barclay-Watts & Others v Alpha Paraneti & Others [2019] HQ11X02379, a substantial cross border dispute involving mis-selling of holiday lets in Cyprus.